if loan has debit balance can we take it as an asset

The loan which we give to others has a debit balance, which is an asset. If we have taken it then we must take it under the liablites..

The loan which we give to others has a debit balance, which is an asset. If we have taken it then we must take it under the liablites..

If a loan has a debit balance , it means that we have given loan to someone, and for which we will recieve interest.

Nasically it has a debit balance because of the following:

firstly, loan is part of real account and according to it what goes out is debited.........so here also we are giving loan so it is to be debited.........

so this is the reason that it is debited............

Now, loan (Dr.) is treated as an asset because for us it is an investment for which we will receive a regular interest.....

So, the above mentioned are the reasons that we treat LOAN(Dr.) as an asset.....

Hope that this answer would be helpful for you !!!!!!!

Please note that Loan is a Liability, you have taken it from someone, so this means you have to return it too.On the other hand, whaen we take loan, generally cash comes in, that's why we Debit it, but creditor's personal account is credited as per the reule "Credit the Giver"